Brad Garlinghouse, CEO of Ripple, said he believes the U.S. Securities and Exchange Commission (SEC) is "acting outside the law" in light of recent efforts to go against a court ruling on the classification of Ripple's cryptocurrency XRP. 

“I think the SEC is acting outside the law. I think you have a rogue agency,” said Garlinghouse on an episode of Thinking Crypto while discussing the SEC's continued efforts to classify XRP sales as securities despite the court's earlier findings.

On October 18, the U.S. Securities and Exchange Commission (SEC) moved forward with its appeal of a recent court ruling regarding Ripple and its cryptocurrency, XRP. The appeal, filed on October 10th and later approved, challenges a decision by Judge Analisa Torres that XRP sales on digital exchanges are not securities.

The July 2023 ruling by Judge Analisa Torres determined that while Ripple’s sales to institutional investors qualified as unregistered securities, XRP transactions on exchanges and personal sales by Ripple executives, including Garlinghouse and Chris Larsen, did not breach securities laws.

In its appeal, the SEC is also disputing Ripple’s non-cash XRP distributions made for services. The outcome of the case could set a precedent for the future of digital assets.

According to a recent report by Social Capital Markets, SEC-imposed fines have increased from $150.26 million in 2023 to $4.68 billion in 2024—a 3018% increase in penalties. This rise underscores the agency's scrutiny and enforcement in the financial markets, which some argue is disproportionate and counterproductive.

A report by Social Capital Markets indicates that the SEC has levied over $7.42 billion in fines against crypto firms since 2013.